Wednesday, 25 June 1980
Seanad Eireann Debate
Mr. McDonald: I should like to ask the Minister about one or two points. In subsection (2) (b) the Irish Land Commission enjoy an exclusion. Do I take from that that the commission are financially embarrassed or that the Government do not want to increase the load on them, or is it that they are not enjoying the benefits the Minister has outlined that the farming community are getting? On the question of the categories of farmers who the Minister has very dramatically outlined to the House are going to benefit from the Rates on Agricultural Land (Relief) Bill. The Minister said that the Bill gives relief to 71 per cent of total farmers who are under £20 valuation. Surely the Government or, indeed, the civil servants who assisted in the drafting of this Bill are not seriously considering levying rates on farmers under £20 valuation who in the main qualify for free dole and home assistance.
Of course this Bill is necessary from the point of view that this system of taxation must be changed. This is very important. The Minister said that only 8.4 per cent of the farmers in total have valuations in excess of £40. It will give some people some idea of the proportions of the burden of rates when I say—and I challenge the Minister to  deny it—that the total amount of hard cash paid by farmers this year will exceed the total amount of money which was paid by the entire community before the Government removed the burden of rates from householders, and this when only 8 per cent of farmers are liable for the full brunt of rates.
The Minister has given the figures even for his own constituency where a farmer with £40 poor law valuation last year had a demand of £180 whereas this year that demand goes up to £441.60. In our constituency—the Minister and I have in common that we come from the same Dáil constituency—farmers with £50 poor law valuation had a demand last year for £250 and that has shot up this year. Despite the fact that farm incomes, as the Minister knows, in the midlands have drastically reduced this year, the rates bill was £250 in 1979 and it is £552 this year. That is a sizeable demand on people who are barely turning over.
The Minister is a realist and he understands the position that his neighbours are in. I would not accuse him of thinking that everything is rosy down in the midlands, but the burden of rates this year is going to affect people adversely to a tremendous extent. The Minister is imposing this increased burden on a farmer with a £59 valuation in Laois-Offaly who had a demand for £313 rates last year. His demand this year is £651. The Minister may have more exact figures than those but they represent about the same proportion.
We are talking about that increase in the demand and people are misled into thinking that this is the only thing that farmers pay and that they can write it all off against tax. Instead of reducing the number of people who can benefit under this Bill, the Government, knowing the situation in the country, should have gone directly in the opposite direction. They should have raised the threshold for farmers under this section to £60 instead of coming from £50 to £40, in the other direction, because this is necessary.
The various levies that people are ex-Offal  pected to pay this year out of reduced incomes, have been clearly stated. Some of the earlier speakers on the Bill mentioned the various milk levies and the agricultural price increase package out of which people are expected to meet the demands of this Bill. There are nine or ten different levies. This is a cause for tremendous unease and it is something that the Minister should consider seriously.
The rating system has outlived its usefulness. It is about 150 years old. That kind of yardstick is out of date. Having regard to the fact that the 396,891 farmers under £20 poor law valuation in the main are entitled to free dole under the Poor Law Valuation Act, how can the Minister seriously say that he is giving them an exemption and letting them off paying rates? Are the Government considering taxing the people who are on the dole, getting unemployment assistance or unemployment benefit? We should stop fooling around and look at the problems in the areas where there is real need. There are 396,891 farmers under £20 poor law valuation. We are talking about incomes of £7 or £8 a week having regard to last year's figures and that represents a family farm income. On our side of the river Shannon they do not even qualify automatically for dole and for assistance, whereas in other parts of the Republic they get a fair and more humane crack of the whip.
Minister of State at the Department of the Environment (Mr. Connolly): Senator McDonald referred to subsection (2) (b). It provides that the Irish Land Commission holdings will individually be regarded as being in separate occupation for the purpose of determining entitlement to relief. This is in line with previous legislation on the matter, so there is no alteration there at all and I want to assure the House on that.
I do not want to take up the time of the House on percentages. I dealt with that matter in detail, but under section 1 (2) the agricultural grant allowance will not apply to a person who is rated in  respect of land having a valuation which in aggregate equals or exceeds £40. This is the only change in the allowances provided by the Bill. This represents a change from the 1978 Act under which the ceiling for entitlement in any year was expressed to be the threshold for liability to income tax on 1 January of that year in the case of a full-time farmer. If the 1978 Act provision were to continue in respect of 1980 the ceiling on the rates relief for 1980 would be £50 valuation. Rated occupiers with holdings in different county health districts, or in areas added to urban authorities as a result of a boundary extension made after 2 March 1976, will have such holdings aggregated on a national basis for the purposes of the £40 valuation limit. The form of national aggregation provided for in the Bill is slightly more limited in scale than the corresponding provisions in the 1978 Act. The 1978 Act provided that all land would be aggregated. The present Bill confined national aggregation to areas that benefit from rates relief under the Acts, for example county health districts and urban areas extended since 2 March 1978.
To hear people throughout the country talk you would think we had created havoc with this Bill. Study reveals that in the whole of the country 79.8 per cent of the holdings are under £20 valuation. I can give the number of holdings in any county and any information regarding them to the House if it requires them.
Mr. Connolly: We are alleviating great hardship because we are the Government who brought in the under £20 valuation de-rating and 79.8 per cent of the holdings are involved there and 11.8 per cent are from £20 to £40. In County Galway 97 per cent of the holdings are under £40. One would think from Senator Connaughton that we had surrounded Galway. That was never the intention of the Minister, myself or the Government. I want to clarify it in case I am talking too quickly and Senators may not hear me.
Mr. Howard: I would like to put a few queries to the Minister on this section. I admire his performance in replying to the Second Stage and also now. I am impressed to hear that the thing is being clarified when in fact it is becoming more confused. I know the Minister is drawing a very subtle distinction between holdings and rated farmers. On two occasions in his reply he practically said the word “farmer” and then quickly reverted to “holding”. There is a very subtle and significant difference. In the west, where I come from, there are very many farmers who find that they may have half a dozen demand notes representing half a dozen holdings that are aggregated.
It would have been very helpful if the percentages the Minister gave in his reply to Second Stage had been circulated with his Second Stage speech and then we would have an opportunity of studying them. As far as I can recall, the figure he gave in relation to County Clare was something like 92 per cent of all holdings. As far as I know there are about 11,000 farmers in County Clare and the greater part of 1,000 would be caught in the £40 to £60 bracket. What number of farmers in County Clare in the £40 and £60 PLV bracket will lose out as a result of this measure?
Mr. Connolly: I do not have a breakdown of the figure in exact holdings, because some farmers and landowners may have a couple of holdings. I just want to clarify a point in regard to County Clare, which I regard as quite a well-to-do county, and it is my boss's county as well. Under £20 valuation the figure is 82.04.
Mr. Connolly: No, percent. I will  deal with holdings later; I am giving percentages. Under £20 valuation—82.4 per cent; for £20-£40 valuation the figure is 12.1 per cent, making a total of 94½ per cent with valuations under £40. The balance of 5½ per cent have rateable valuation of £40 and over.
I do not think Senator Howard need worry about these holdings. A farmer could have three holdings but they are added and treated as one holding. The figures given are of a general nature. In County Clare the number of holdings between £40 and £60 valuation—I want to explain here that there may be two or three holdings grouped into one—is 697. For example, a farmer could have some land in Ennis and other land in Kilrush.
Mr. Howard: I thank the Minister for giving this information. He has given me so much he has set me looking for more. Rather than deal with percentages, could he give me the figure for the total holdings in County Clare?
Mr. McDonald: Could I ask the Minister if he would consider extending the relief in this Bill? He, like everybody else, is aware of the difficulties and hardships that exist. The figures he has given the House, for which we are grateful, clearly indicate that the burden of rates—which is greater than it was a couple of years ago if you count the actual cash that changes hands and goes to the local authorities—falls on 8 per cent of the farmers. This means they are paying more in rates than the total population of the Republic paid three years ago. Included in that figure was the urban population of the city of Dublin who made an enormous contribution in rates. Unless I am greatly mistaken, that is an alarming figure.
For the last two years farmers have suffered substantial decreases in their income and they are faced with a decrease again this year. Let the Minister take  any commodity he likes—cattle, sheep, barley, milk, beef. Between levies and the reduction in prices, farm incomes are reaching crisis proportions. In the main, farmers working on overdrafts or term loans are finding extraordinarily grave hardship and difficulty in trying to meet the huge 20 per cent increase in rates that are being charged. Instead of reducing the number of people the Minister will benefit—and I agree people under £20 valuation are entitled to the farm dole or unemployment assistance by virtue of their incomes—would he not have regard to the difficult situation and the period farmers are going through and extend the benefits upwards, rather than restricting them to people who are under £40 valuation?
Mr. Connolly: I have my mind made up on this. Senator Cooney referred earlier to Ministers of State coming in and he alleged they were not well briefed, if I understood his statement correctly. I think he corrected that statement later and stated that I was pretty well briefed. I was present with the Minister on all occasions in the other House when the Bill was going through there. I saw this Bill being drafted. I am not saying I am a know-all on the Bill by any means, but I can, clearly and distinctly, give the House any information on it that is required. For the many years I have been in parliament that has been my style.
In regard to what Senator McDonald said, the answer is no. Senator Howard clearly wanted to know the total holdings in County Clare. The figure is 23,529. As I stated earlier, this could be a grouping of holdings—the total of what the rated occupier would own. That is the position.
In regard to any amendments, this is the Bill I presented here this morning, and this is the Bill we are bringing into law. I am satisfied. Looking at the overall situation, rating has been a controversial subject over a long number of years. Farmers with private dwellinghouses, some very big, do not pay any rates. They get the same relief as the people in private dwellings in the city of  Dublin who have no farms at all. Some people have said—I have not—that this should be looked into. We have no intention of looking into it. We are satisfied to give them this relief.
I want to clarify a point. Look at the percentage this is going to affect, remembering that they can write this off in their income tax accounts. We have to be fair. I have known most Members of this House for a long number of years and I am glad to say my relationship with them has been quite good over the years. But I have to be frank, I am not amending any part of the Bill.
Mr. Connaughton: The Minister is well briefed on the Bill; as a matter of fact he is too well briefed on it so far as his side of the story is concerned. We will come back to the percentages for a minute, lest we have a 100 per cent victory. We want to make sure the situation will be portrayed as it is to the farmers of Ireland. The Minister talks about 97 per cent in Galway. That would indicate that only 3 per cent of the farmers in Galway will actually be in the rates net. But I am saying, as Senator McDonald has said, that the hardship involved and the amount of money that particular section will pay bear no relationship to their earning capacity. I do not have to tell a rural Member, in a year when incomes are falling dramatically, that they will never get the chance of putting the rates against income tax. They will not be eligible for income tax because they will not have enough income. As far as I am concerned, the Minister is making a very good case for the Government, and I congratulate him on that but let it go out from here today that the vast majority of the people now caught in that rates net will not get any income tax relief from it, because they will not be paying income tax. That is the problem.
The Minister may say the Bill will not be amended and because he has the necessary voting power behind him that is exactly what will happen. Is it not true to say that there will be tremendous hardship on a farming family who are unable to meet this particular rates bill? I  count it damn bad law that there is not some note taken of the problem. The Minister said that one would assume from what I said earlier that he was closing in on County Galway and squeezing the life out of all the farmers. All I have to say is, if he continues the line of action his Government are taking, that is exactly what he will do.
This is only one of about ten different types of taxation that have come before us. Do not let it be said that the farmers are happy and that the Minister or anybody else has not heard their reaction to this. As I said earlier, when rates bills were sent out very recently, there was whole-scale reaction. Notice should be taken in the Bill of severe hardships.
Mr. O'Brien: On Radio Éireann news this morning there was an item to the effect that some farmers because of the steep increase in interest charges were in difficulty and not able to pay for land recently acquired. It was reported that they were offering these farms to the Land Commission but apparently the Land Commission have no money to take them. Would the Minister consider a waiver of rates schemes for farmers in that position?
Mr. Connolly: That is a matter for Galway County Council and every other county council now. It is there in the provisions. We have to get this right. I want to make this absolutely clear: in cases of real hardship local authorities can always write off the rates. Let us take Galway as an example. I was amazed, and I double checked the figure to see if it was correct, when I discovered that 9 per cent of the holdings in Galway were under £40 valuation. It was proved correct. The rates on land and houses in  the year 1977 was £107 million. This year farmers are being asked to pay about £45 million in rates on land. If we had not brought in this Bill they would be paying £38 million more and another £11 million if we had not taken rates off their houses.
I was in on the discussion of the Finance Bill in the Dáil when Fine Gael wanted the notional system brought in for a year. I am against the notional system because if one has a bad year one is stuck with it. Fine Gael were not serious about the notional system and I will tell Senators why. When their amendment was put, they did not call for a vote. They shied away.
Mr. Connolly: We honoured any commitments we gave at that time. To get back to the Bill, the truth hurts. You cannot have your loaf and eat it. As I said earlier, no farmer or rated occupier in my constituency complained to me, either by word or letter. I travel through my constituency quite a lot. In the clinics I attended, not one person told me this was wrong. Nobody wants to pay rates or tax. Like everybody else I want to pay as little tax as I can. That is human nature. We have to run the affairs of the State and of my Department. Everybody is demanding more of the cake, whether it is there or not, but there is a limit to the money I have available to me. There is always a limit but taking everything into consideration I cannot understand what all the belly-aching I heard in both Houses is about.
Mr. O'Brien: The Minister did not specifically reply to the question I raised about these people who, according to the news item this morning, are in difficulty because of the high interest rates.
Mr. O'Brien: I understand that but I would like it to be clearly understood that the county manager has a certain amount of discretion in these matters. Even without actually committing himself, if the Minister said such cases would be entitled to sympathetic consideration that might influence county managers when administering the waiver of rates to take on the spirit of the Bill, expressed by the Minister at this time.
Mr. Connolly: County managers have powers in cases of hardship to write off rates, and to make a reduction of rates, I always found county managers reasonable men. I am glad to say that. If Senator O'Brien or any other Senator has a case of hardship, I do not see any reason why he should not bring it to the notice of the county manager with all the relevant information. I do not see any problem here.
Mr. McDonald: I do not wish to prolong this argument, but I would like the Minister to clarify one matter. He gave an impressive figure of the amount of money ratepayers were saved this year. Is it not true to say that in two humble counties—Laois and Offaly—the amount of money that will be levied on rates this year will be on a par with the amount of money collected three or four years ago, before the rates were removed from dwellings? This is significant, especially since the Minister's own figures indicate that this money is being contributed, paid or squeezed out of 12.1 per cent of the population of householders in County Offaly, and a somewhat smaller percentage of people in County Laois. The Minister, being a  practical man, must admit that last year a farmer with a valuation of £40—to take the easy figure—paid £180 in rates. As a result of Government policy this is being increased to £441 this year. This will cause considerable hardship. There is no use saying the farmer can write it off against rates. He was not asked to pay rates until this year. This will cause considerable hardship taking into account the decline in agricultural incomes.
Mr. Connolly: Rates from 1978, 1979 and 1980 went up 10 per cent. I would like to remind Members of the House that I got a number of requests, even since I took over the portfolio, mainly from Opposition councillors, Deputies and Senators who were not satisfied with the 10 per cent rate. They wanted to raise it more. If my Minister had not brought in the ceiling, what would farmers be paying? County councils and local authorities throughout the country could increase the rate by 20 per cent on the farmers, rated holders and business people. That was why we did that. If we had allowed a free-for-all, business people and rated holders could be paying another 60 per cent instead of 10 per cent in 1978, in 1979 and now in 1980. They could even be paying an extra 100 per cent. This is the situation. You cannot have your loaf and eat it. I am satisfied that the introduction of this ceiling was the proper thing to do. In my own constituency, a number of business people and rated holders congratulated me on that stand. They said the county councils and local authorities would have gone to town on the rates if the Minister had not stepped in.
Mr. Connolly: I want to put this right. If we had not put a ceiling of 10 per cent, what would have happened? What would the farmers be saying to every local authority? I was a member of a local authority for a number of years and I know what matters used to come up at meetings. When it came to striking the rate the farming and business community  asked us to go easy on them. Other members on local authorities know that also.
Mr. Connolly: It may be a cumbersome procedure, but often we are told of cases of hardship. I have no doubt there are some genuine cases of hardship. Sometimes it is alleged that there is a case of hardship, but when it is checked a different picture emerges altogether. This is a function of the manager to decide on. Knowing county managers throughout the country—I often had a difference of opinion with managers, not of a personal nature but on policy—they have carried out their responsibilities in this manner very fairly. Where there were cases of hardship, the person rated was helped.
Mr. O'Brien: In his enthusiasm to make his case, the Minister said something that, on reflection, he might have preferred not to have said. He said that but for the 10 per cent call from the Department of the Environment local authorities would go to town altogether. I know the Minister is regarded as a reasonable man on all sides of this House and in the other House, and I would not like it to go on record, without correction, that it is the Minister's considered view that legal local authorities would go to town on the ratepayers if there was not a check on them from above. Local authorities——
Mr. O'Brien: As a member of a local authority I am glad that was the intention. The only reason the local authorities complained about the 10 per  cent curb was that many of them found themselves in the position of not being able to discharge their obligations with the limited money they had.
Mr. Connaughton: I cannot understand why it is not desirable that a hardship clause should be written into this Bill. It is all very well to say that the county managers have powers to do that, equally it would be a pity if this type of hardship clause were left to the manager. We are very lucky that we have so many fine county managers but nevertheless the degree to which they would acknowledge hardship in the strict sense of the word might not alleviate hardship, which are two different things. I cannot understand why we could not have some agreement on this particular Bill. A clause could be inserted to cover the case where genuine hardship was proved and in the eyes of the law those people would get certain relief. That is very important. The Minister has not convinced me yet that it is impossible to do it.
Mr. Connolly: I might be accused of interfering with the freedom of local authorities. I have no intention of following Senator Connaughton's suggestion of interfering because the local authority are the best judge of individual personal hardship in respect of any case. I do not think it would be right of me to interfere. The local authority are in the best position to judge the situation. This Bill is a relief Bill to the extent of £38 million. As I said earlier in regard to hardship cases, I would not like to interfere in a situation where, in my opinion, managers of local authorities throughout the country perform their duties in this respect very well.
Mr. McDonald: Will the Minister agree that it is not possible to collect £38 million from people under £20 valuation and certainly that there would be no moral obligation on people on that level of income to pay that kind of money? It is a necessary relief and the Minister should admit that. The only question I was arguing was that he should have  taken the relief upwards rather than downwards. He should not have restricted the number of people who, in all fairness, are entitled to relief this year.
de Brún, Séamus.
Donnelly, Michael Patrick.
Jago, R. Valentine.
Mulcahy, Noel William.
O'Toole, Martin J.
Cooney, Patrick Mark.
Question proposed: “That section 2 stand part of the Bill.”
Mr. Cooney: I think the Minister has indicated that section 2 makes certain changes.
Mr. Connolly: The Rates on Agricultural Land (Relief) Act, 1976, provided for the extension of reliefs granted under the Rates on Agricultural Land Relief Acts to areas added to county boroughs and urban districts as a result of boundary extensions made on the passing of the Act on 7 March 1976. This section, together with sections 3 and 4, contains a number of technical amendments and adaptations of the Act so as to facilitate administration of the reliefs in such urban areas and to remove any doubts as to the application of the reliefs.
Section 2 provides, for the purposes of calculating allowances in respect of land which was added to a county borough, borough or urban district after 7 March 1976, the rate to be used shall be the municipal rate. The Act provided that the allowances were to be calculated on the basis of the general rate in the £. This expression relates to county councils only. There is no general rate in the £ in the county boroughs and urban districts, where only the municipal rate exists.
Mr. Cooney: Can the relief now being given to agricultural land where an urban district is extended be given to agricultural land which traditionally has been within urban districts?
Mr. Connolly: No, only land taken since 1976.
Mr. Cooney: Would the Minister consider this: a farmer at the moment who has land inside the urban boundary has to pay the full municipal rate and has land outside the urban boundary on which he gets an abatement on his valuation: if the land outside the urban boundary is taken into the urban district on an extension of the urban district, he is paying different rates on two different parts of his land.
Mr. Connolly: Under the Act, any old land held previously is not affected that much. It stands at the old rate on that. Since he brought in the 1976 Act it comes under this.
Mr. Cooney: I appreciate that. The point I am making to the Minister is that agricultural land which was within an urban district before 1976 has to carry the full municipal rate.
Mr. Connolly: No.
Mr. Cooney: It can get an abatement?
Mr. Connolly: It can get an abatement under the old existing Acts.
Mr. Cooney: I understood it to be——
Mr. Connolly: I should clarify that.
Mr. Cooney: ——a bill of abatement the same as would be available to a farmer outside the urban area.
Mr. Connolly: No, allowances under the Rates on Agricultural Land (Relief) Acts are not given to occupiers of agricultural land in county boroughs or urban districts. Agricultural land in these areas get relief under the Local Government Act, 1940, and various City Management Acts. These are permanent reliefs, unlike those under the agricultural grant. Urban district council reliefs for land are 40 per cent; boroughs, except Dún Laoghaire, 25 per cent; Dún Laoghaire Borough, 50 per cent; Dublin County Borough, 50 per  cent; Cork County Borough, 50 per cent; Waterford County Borough, 30 per cent; Limerick County Borough, 40 per cent. Land in urban areas will continue to benefit from rates or relief as outlined above. The reliefs for urban land are not recouped by the Exchequer. The total land valuation in the country is approximately £7 million, of which only £101,000 is in urban areas, including the boroughs. The Rates on Agricultural Land Relief Act, 1976, provided for the application of the agricultural grant and allowances to land which might be brought within the county borough or urban district as a consequence of extension of the boundary. The extension of the agricultural grant to such land generally facilitates the extension of urban boundaries by removing one source of objection by farmers, loss of agricultural grant rate relief. The boundary extensions which have taken place since the passing of 1976 Act are Drogheda Borough, Bray Urban District. Youghal Urban District, Tralee Urban District and Waterford County Borough.
Mr. Cooney: I am obliged to the Minister for the detail he has gone into. I take his point that there is and always was relief for agricultural land within urban districts. The point I want to make which possibly I did not make suficiently clearly. Is that relief does not come to the individual farmers within the urban district, that that relief goes in ease of the municipal fund.
Mr. Connolly: It does.
Mr. Cooney: Goes where?
Mr. Connolly: He gets the percentage of the relief that I have read out.
Mr. Cooney: This now is for a man who was always in an urban district.
Mr. Connolly: Yes.
Mr. Cooney: The relief goes directly to the farmer in ease of his particular rate demand note?
Mr. Connolly: Yes.
Mr. Cooney: It appears on his rate demand note? He does not have to pay the full municipal £ in £ on his land valuation.
Mr. Connolly: Correct.
Question put and agreed to.
Sections 3 to 6, inclusive, agreed to.
Title agreed to.
Bill reported without amendment and received for final consideration.
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